San Diego Housing Commission Moving Forward Moving To Work Program

Transcription

1 San Diego Housing Commission Moving Forward Moving To Work Program Annual Report for Fiscal Year 2010 Resubmitted December 2, 2010 San Diego Housing Commission Rental Assistance Department 1122 Broadway, Suite 300 San Diego, CA

2 Table of Contents TABLE OF CONTENTS Section I. Introduction and Overview A. Introduction... 1 B. Goals... 1 Section II. General SDHC Operating Information... 3 A. Housing Stock Information... 3 B. Leasing Information, Actual... 4 C. Waiting List Information... 6 Section III. Non-MTW Related SDHC Information (Optional)... 7 A. Planned Sources and Uses of Other HUD and Federal Funds... 7 B. Non-MTW Activities... 7 Section IV. Long-Term MTW Plan (Optional)... 8 Section V. Proposed MTW Activities: HUD Approval Requested... 9 Section VI Ongoing MTW Activities Matrix Implement a Revised Inspection Protocol Authorize SDHC to Inspect and Determine Rent Reasonableness for SDHC-Owned Units Implement Triennial Income Recertifications for Elderly and Disabled Clients Choice Communities Standardize Utility Allowances By Unit Size Simplify Income and Asset Verification Systems Adopt a Local Interim Recertification Policy Establish HCV Homeownership Program Expand the Project-Based Voucher Program Public Housing Development Update on Achievement Academy Section VII. Sources and Uses of Funding...36 A. Planned and Actual Sources and Uses of MTW Funding B. Planned and Actual Sources and Uses of State or Local Funds C. Uses of the COCC D. Cost Allocation Fee for Service E. Single Fund Flexibility Replacement Housing Factor (RHF) and ARRA Funds Update Section VIII. Administrative Information...38 A. Performance and Evaluation Report B. Agency Certification C. Capital Fund activities not included in MTW Block Grant D. Statutory Compliance Certification Appendix A. Statutory Compliance Certification

3 Section I Introduction and Overview A. Introduction SECTION I - INTRODUCTION AND OVERVIEW The San Diego Housing Commission (SDHC) is proud to report on the successes achieved during the first year of reinstatement as a Moving to Work (MTW) agency. This MTW Annual Report contains the quantitative measurements for the corresponding Fiscal Year 2009 and 2010 MTW Annual Plan activities according to the format set forth by HUD. As one of 33 designated MTW participants, SDHC is confident our agency can continue to effectively contribute to the goals of the MTW demonstration program and advance the statutory objectives put forth by the Department of Housing and Urban Development (HUD). MTW flexibility has enabled SDHC to initiate changes to its programs and practices necessary to address local housing needs and the challenges intrinsic to San Diego communities. Eight of the ten activities proposed in the Fiscal Year 2010 MTW Annual Plan had been implemented as of the close of the Fiscal Year, with a ninth activity, the close of escrow on new Public Housing units, closely following. Streamlining regulatory requirements and internal procedures allowed SDHC to reduce costs and expend Federal monies consistent with HUD s statutory objectives. Our agency continues to concentrate efforts towards reforming program administration, eliminating inefficiencies, and improving business systems. The Fiscal Year 2010 Annual Report provides a detailed summary of all MTW initiatives proposed by SDHC and approved for adoption by HUD. Through the MTW Annual Report, SDHC will not only ascertain the successes of the initiatives, but expects to use the knowledge to further identify programmatic needs and additional areas for improvement. SDHC will also look to other MTW agencies for inspiration and guidance when constructing and implementing future initiatives. B. Goals SDHC seeks to accomplish the three statutory goals of the MTW demonstration program through the following activities: Address the issue of homelessness in San Diego by creating solutions that recognize the unique conditions of being homeless in the City of San Diego; Further streamline processes in the Rental Assistance Department to increase cost effectiveness; Increase affordable housing options in the City of San Diego; Maintain affordable rent levels in both assisted and non-assisted units; Integrate MTW flexibility with applicable agency-wide administrative processes; and Offer solutions to families seeking to move toward self-sufficiency. Following is a brief summarization of each Fiscal Year 2010 initiative as a quick point of reference: 1. Reduce the number of required inspections and allow owners to self-certify HQS for minor fail items. SDHC uses a revised inspections protocol to reduce the number of HQS inspections conducted annually. The initiative allows responsible property owners to self-certify the repair of minor fail items, and well-maintained units are placed on a biennial inspection cycle. Quality Control inspections ensure HQS standards are consistently observed and applied at all assisted properties. 2. Inspect and determine rent reasonableness for SDHC-owned properties. Authorization was received to allow SDHC to inspect and determine rent reasonableness for SDHC-owned properties. Quality Control inspections are conducted on randomly selected units to ensure HQS standards are consistently upheld at all SDHC-owned properties and contract rents conform to rent reasonableness requirements. 1

4 Section I Introduction and Overview 3. Conduct triennial income and family composition recertifications for fixed-income elderly and disabled households. Elderly and/or disabled families with a fixed income (excluding TANF) were placed on a triennial certification cycle. Cost of living adjustment (COLA) certifications are conducted during the two years the family was not required to complete a thorough annual certification. 4. Choice Communities. The initiative is a four-pronged approach to enable families to move from areas of high-poverty to areas of low-poverty. a. Eliminate the 40% affordability cap for participants moving to low-poverty areas. Participants are allowed to pay up to 50% of their monthly adjusted income towards their rent portion. b. Create a Moving for Opportunity program. SDHC developed resources (brochures and a designated staff member) to disseminate information to participants interested in relocating to areas of low-poverty. c. Create a revolving security deposit loan program. A revolving security deposit loan program was developed to assist participants with security deposit payments when relocating to a unit located in a low-poverty neighborhood. Each participant receiving security deposit assistance is required to repay the loan within a prescribed timeframe. d. Increase payment standards in low-poverty neighborhoods. Participants moving into a zip code designated as low-poverty receive a higher payment standard than otherwise authorized for HCV holders. 5. Standardize utility allowances by unit size. A revised utility allowance schedule was created to simplify the process of assigning utility allowances to units. The simplified chart contains standard utility allowances based on unit bedroom size and whether or not the tenant is responsible for sewer/water. 6. Simplify income, asset, and allowance verification requirements. Program participants with assets totaling less than $10,000 are only required to self-certify their combined assets have a cash surrender value below the prescribed threshold. Participants with assets equaling $10,000 or greater are required to submit verification of each asset. SDHC revised the verification hierarchy to confirm income and asset values. 7. Adopt a local interim recertification policy. The interim policy was designed to reduce and limit the number of interims required when a participant requests a rent adjustment due to loss of income. Interim adjustments for rent reductions are only granted once between regularly scheduled annual certifications. The initiative encourages participants to remain employed, therefore promoting selfsufficiency. 8. Establish a homeownership voucher program and use block grant funds to assist Housing Choice Voucher (HCV) participants. A homeownership program was created to assist income-eligible HCV participants with purchasing a home. Housing assistance payments are utilized to assist with a mortgage payment rather than as a rental payment. Incentives to purchase a foreclosed home are also program components. 9. Expand the use of the project-based voucher (PBV) program. SDHC set aside 400 vouchers for the purpose of creating PBV units for low-income families and the chronically homeless. 200 vouchers were designated to each category of PBV participants. 10. Undertake public housing development with public housing or voucher funds. SDHC proposed using MTW single fund flexibility to purchase 33 public housing units by the end of Fiscal Year

5 Section II General SDHC Operating Information A. Housing Stock Information SECTION II - GENERAL SDHC OPERATING INFORMATION 1. Number of public housing units at the end of the plan year, discuss any changes over 10%: 36 with no changes over 10 percent. 2. Description of any significant capital expenditures by development (>30% of the Agency s total budgeted capital expenditures for the fiscal year): N/A 3. Description of any new public housing units added during the year by development (specifying bedroom size, type, accessible features, if applicable): 0 4. Number of public housing units removed from the inventory during the year by development specifying the justification for the removal: 0 5. Number of MTW HCV authorized at the end of the Plan year; discuss any changes over 10%: 13,562 with no changes over 10 percent. 6. Number of non-mtw HCV authorized at the end of the Plan year, discuss any changes over 10%: 403 with the following changes over 10 percent: The non-mtw vouchers include Enhanced/Protection vouchers, TBRA, VASH, and PBV that have contracts yet to be converted to MTW. All PBV contract renewals will include provisions for MTW. This number is more than 10 percent higher than in the Fiscal Year 2010 MTW Plan due to an increase in VASH lease ups as well as an error in reporting the Enhanced/Protection vouchers. 7. Number of HCV units project based during the Plan year, including description of each separate project: A total of 85 units were project based during Fiscal Year These units are in addition to the existing 39 units project based prior to MTW designation. Please see Leasing Information-Actual in Section II below for a full description of the developments containing the 124 units designated as both MTW and non-mtw PBV. The matrix below provides a description of all developments and authorized PBV units added as MTW PBV during the Plan year. Development Name PBV Start Date Total No. of Units in Development Total No. Project Based Units Authorized in Development Total No. Project Based Units Leased Up in Development Population Townspeople 9/1/ Homeless Stepping Stone 1/1/ Homeless Potiker 2/1/ Low-Income Alabama Manor 4/1/ Low-Income Santa Margarita (SDHC-Owned) 5/1/ Low-Income Meade (SDHC-Owned) 6/1/ Low-Income Total

6 Section II General SDHC Operating Information 8. Overview of other housing managed by the Agency, eg., tax credit, state-funded, market rate. The properties contained in the table below do not include any tax credit units or partnership properties: SDHC Property Management Property Units SDHC Former Public Housing 1366 SDHC Local Units 5 Via Las Cumbres Local Units 84 Via Las Cumbres Public Housing 36 Maya Linda Units 132 State Housing Units (Otay Villa) 78 State Housing Units (Scattered Sites) 35 City Units 4 Front St (Del Mar Apartments) 34 Sanford Hotel (SRO)* 130 Cuvier St* (La Jolla Marine) 8 Total Units: 1912 *Owned but not managed by SDHC Please note: The public housing tenants living in the former public housing units were given tenantbased vouchers. At the time, some of the families chose to utilize the tenant-based voucher in the unit. Others chose to move to other non-sdhc-owned units with the tenant-based voucher. The units that were left empty were leased to either non-assisted low-income families (at or below 80 percent AMI) or to tenant-based voucher families that were not former public housing tenants. Currently, 86% or 1171 of the 1366 units are rented to voucher families. Of the 1366, 19 of these units are in the process of being project-based (Meade and Santa Margarita developments, included in the PBV chart below). The local affordable housing units are rented by either non-assisted low-income families or tenant-based voucher families. These five units are not formerly public housing units. B. Leasing Information-Actual 1. Total number of MTW PH units leased in Plan year: Total number of non-mtw PH units leased in Plan year: 0 3. Total number of MTW HCV units leased in plan year: 13, Total number of non-mtw HCV units leased in Plan year: Description of any issues related to leasing of PH or HCVs: N/A 6. Number of project-based vouchers committed or in use at the end of the Plan year, describe project where any new vouchers are placed (include only vouchers where agency has issued a letter of commitment in the Plan year): 124 4

7 Section II General SDHC Operating Information Development Name PBV Start Date Total No. of Units in Development Total No. Project Based Units Authorized in Development Total No. Project Based Units Leased Up in Development Population Becky's House 2/1/ Homeless DV Take Wing 7/1/ Homeless Youth Hollywood Palms 12/23/ Low-Income Leah Residence 7/1/ Homeless Women Townspeople 9/1/ Homeless Stepping Stone 1/1/ Homeless Potiker 2/1/ Low-Income Alabama Manor 4/28/ Low-Income Meade (SDHC-Owned) 4/28/ Low-Income Santa Margarita (SDHC-Owned) 5/1/ Low-Income Total

8 Section II General SDHC Operating Information C. Waiting List Information 1. Number and characteristics of households on the waiting lists at the end of the plan year are as follows: WAITING LIST INFORMATION* Applicant Information HCV Public Housing FY 2010 Total FY 2010 Total Composition Single Family Disabled Elderly Total Households Race White Native Hawaiian American Indian Asian Black Other Total Households Ethnicity Hispanic Non Hispanic Other Total Households Income <30% AMI % 50% AMI % 80% AMI >80% AMI Total Households *As of 6/30/ Description of waiting lists (site based, community-wide, HCV, merged) and any changes that were made in the past fiscal year: SDHC will continue to have community-wide wait lists for the HCV and public housing programs. Project based developments designated as supportive service providers will maintain their own individual wait lists to match their target population. As anticipated, the HCV waiting list significantly grew this year from 39,795 in 2009 to a current total of 46,463. The public housing waiting list remained closed; the list was approximately 16,200 last year and has not significantly changed in the past 12 months. 6

9 Section III Non-MTW SDHC Information (Optional) SECTION III - NON-MTW SDHC INFORMATION (OPTIONAL) A. List planned vs. actual sources and used of other HUD or others Federal Funds (excluding HOPE VI): N/A B. Description of non-mtw activities implemented by the agency: SDHC sent a request to the Housing Voucher Management and Operations Division of HUD on March 29, 2010 requesting regulatory and statutory waivers for the HUD-VASH Voucher Program in order to administer HUD-VASH Vouchers in congruence with MTW vouchers. This request was approved on May 27, 2010 with one minor stipulation. SDHC began transitioning current VASH Voucher Program participants July 1, All new program participants as of July 1, 2010 and forward will benefit from MTW flexibility. 7

10 Section IV Long-Term Plan (Optional) SECTION IV - LONG-TERM PLAN (OPTIONAL) In its Fiscal Year 2011 Annual Plan, SDHC outlined a long-term vision for MTW describing its planned focus on the following objectives: Attain new affordable units within the city; Enhance and further streamline the HCV and public housing programs; and Provide new housing solutions for the City s homeless population. New initiatives created in support of these objectives were contained in that plan, and the detailed design and implementation of those activities has begun. These objectives will be carried through to future plans and initiatives as these issues are of the utmost importance to SDHC and to the city of San Diego. In this community, affordable housing units are in high demand but short supply, and SDHC intends to continue to add family units to its affordable housing portfolio over the next several years, drawing on MTW funds along with other funding sources to use the current market conditions to its advantage. The City s homeless population needs attention, more housing solutions, and services to support the transition from homeless to at home. The Sponsor Based Homeless Voucher initiative will, at the conclusion of its development and implementation, provide 100 homeless persons with a stable, safe living space, and access to many supportive services to facilitate successful outcomes. Utilizing MTW flexibility over the next several years SDHC will work in conjunction with organizations, government entities, and other service providers in the community to create comprehensive solutions for San Diego s homeless population. Over the last two years, SDHC has begun to examine its rental assistance programs and generate changes to streamline processes and make better use of Federal funds. After extensive research, two Annual MTW Conferences, and listening to rental assistance participants and staff, SDHC has realized that in order to take full advantage of its flexibilities as an MTW Demonstration Agency and accomplish the three MTW objectives of reducing cost and achieving greater cost effectiveness in Federal expenditures, giving incentives to families with children where the head of household is working, seeking work, or is preparing for work by participating in job training, educational programs, or programs that assist people in obtaining employment and becoming economically self-sufficient, and increasing housing choices for low-income families, a major innovation is needed. Therefore, over the next several years SDHC will embark on a journey of change. The rental assistance programs will undertake a major rent reform initiative designed to encourage families to attain the goals of increasing income, completing education, and becoming more economically self-sufficient. This program renovation will also streamline the rent calculation and program administration processes. The goal of this endeavor is to use Federal dollars more efficiently and sensibly while using the cost savings to provide assistance to additional low-income families, increase understanding of the rental assistance program among participants, enhance customer service, fund aspects of the program that will increase services to those families to put them on the track to self-sufficiency, and other activities related to MTW and SDHC s long-term objectives. It is both with anticipation and an acknowledgement of the considerable efforts ahead that SDHC looks forward to the next eight years of its MTW Demonstration participation. The authority provided under MTW allows this agency to restructure and design programs specifically targeted toward our local community needs, and we move forward with the intent to use this authority to improve the lives of our low-income families. 8

11 Section V Proposed MTW Activities: HUD Approval Requested SECTION V - PROPOSED MTW ACTIVITIES: HUD APPROVAL REQUESTED Fiscal Year 2009 marked SDHC s first year of reinstatement as an MTW agency. In the corresponding MTW Annual Plan, SDHC proposed ten initiatives for implementation over the course of the fiscal year. All initiatives were successfully implemented with the exception of the Local Interim Recertification Policy and Undertake Public Housing Development initiatives. Due to the many changes in procedures facilitated by the introduction of MTW initiatives, SDHC determined it was in the best interest of Rental Assistance Department personnel to postpone the implementation of the revised interim policy until all other streamlining initiatives were applied to HCV processes and staff successfully navigated through the adjustment period. The initiative is expected to be fully implemented during the winter of A 39 unit development was identified for acquisition and conversion to public housing units during Fiscal Year Due to unanticipated delays, the escrow period did not close before the end the Fiscal Year, but shortly thereafter. Therefore, this activity will be considered as implemented in Fiscal Year 2011, and the information will be detailed in the Fiscal Year 2011 MTW Annual Report. Detailed information concerning each initiative is fully discussed in Section VI of this report. Please note that due to restructuring, public housing tenants did not participate in MTW activities in Fiscal Year SDHC plans to introduce the applicable initiatives to public housing developments within the upcoming fiscal year. 9

12 SECTION VI - ONGOING MTW ACTIVITIES: HUD APPROVAL PREVIOUSLY GRANTED # Initiative Description Statutory Objective Plan Year Implementation Date 1 Implement a revised inspection protocol Reduce costs and achieve greater cost effectiveness 2010 Implemented October 1, 2009 and June 1, Authorize the SDHC to inspect and determine rent reasonableness for SDHC owned properties Reduce costs and achieve greater cost effectiveness 2010 Implemented July 13, Implement triennial income certifications for elderly and disabled clients Reduce costs and achieve greater cost effectiveness 2010 Implemented October 1, 2009 Choice Communities Components Eliminate 40% Affordability Cap Implemented January 1, Moving for Opportunity Program Increase housing choices 2010 Implemented January 1, 2010 Revolving Security Deposit Loan fund Implemented January 1, 2010 Increase payment standards in low-poverty areas Implemented June 1, Standardize utility allowances by unit size Reduce costs and achieve greater cost effectiveness 2010 Implemented April 1, Simplify income and asset verification systems to reduce administrative costs Reduce costs and achieve greater cost effectiveness 2010 Implemented October 1, Adopt a local interim certification policy Increase housing choices; encourage self-sufficiency 2010 Implementation postponed to Winter Establish an HCV homeownership program Increase housing choices; encourage self-sufficiency 2010 Implemented October 1, Expand the PBV program Increase housing choices 2010 Implemented September 1, Undertake Public Housing development Increase housing choices 2010 Acquisition of 39 public housing units escrow closed in Fiscal Year Economic Development Academy (Achievement Academy) Encourage self- sufficiency 2009 Opening October 1,

13 1. IMPLEMENT A REVISED INSPECTION PROTOCOL Impact of Activity: The San Diego Housing Commission (SDHC) received authorization from HUD to revise inspection requirements by waiving mandatory annual inspections and allowing property owners and tenants to self-certify the repair of minor fail items identified during annual inspections. Units passing two consecutive initial and/or annual inspections on the first attempt qualify for placement on the Biennial Inspection Cycle. The unit remains on the biennial cycle as long as the unit continues to pass inspection on the first attempt in subsequent years. Upon a failed inspection, the unit reverts back to the annual inspection cycle until meeting the eligibility requirements for placement back onto the Biennial Inspection Cycle. (In the event of a move-out, the unit will temporarily revert to the annual cycle. If a new MTW participant seeks to move into the unit and the initial inspection is conducted with a pass result on the first attempt, the unit will regain biennial status.) In turn, inspectors conducting an annual inspection where only a minor fail item prohibits the unit from receiving a Pass result have the discretion to allow the tenant and owner the opportunity to complete a Self-Certification of Repair form in lieu of scheduling a second inspection. When the option is available, the tenant and property owner remedy the minor fail item and return the signed Self-Certification of Repair form to SDHC. The unit is issued a Pass status upon receipt of the form. However, the issuance of a Self-Certification of Repair form is considered a Fail result with regard to qualifying for placement on the biennial cycle. Using a revised inspection protocol, SDHC predicted saving 1.5 FTE due to the overall reduction of mandatory Housing Quality Standards (HQS) inspections utilizing the capacity of the Self-Certification of Repair process and the Biennial Inspection Cycle system. The total number of inspections was also anticipated to reduce by approximately 18 percent due to the streamlined processes. Moreover, the number of failed inspections was expected to reduce while the number of inspections passing the first time would increase. These factors would also contribute to the reduction in staff time related to conducting inspections. Since the approach to reducing mandatory inspections was completed in two phases, the full impact of the initiative was not realized during Fiscal Year The ability for tenants and property owners to selfcertify the repair of minor fail items and placement of units on the Biennial Inspection Cycle were both implemented effective October 1, 2009 and June 1, 2010 respectively. With respect to the Fiscal Year 2010 Annual Plan: The baseline data was derived using a standard report integrated into the housing management software system. While generating data to track the monthly statistics, SDHC identified areas for improvement in the software reports. Thus, the report was modified to capture additional applicable information when generating data, therefore increasing accuracy and contributing to the overall integrity of the data. Due to the adjustments in the report, the baseline numbers were revised to the following: Metric Original Baseline Revised Baseline Total number of inspections 22,169 20,177 Total number of annuals 18,532 16,890 Total number of passing annual inspections 13,778 12,630 Total number of units passing inspection the first time N/A 11,416 Total number of failed annual inspections 4,755 4,260 11

14 Although not a metric, the Fiscal Year 2010 Annual Plan identified 6,682 units as having at least two passed inspections and zero failed inspections, which is the criteria used for determining eligibility for the Biennial Inspection Cycle. Using the modified report, the number was revised to 6,028 units. SDHC would also like to note a revision of a statistic contained within the Fiscal Year 2010 MTW Plan. The initiative description noted a 74 percent pass rate of first time initial and annual inspections conducted during calendar year Upon further review of the baselines, SDHC is revising the statistic to 68 percent. Analysis of inspections data revealed a 10 percent decrease in the first time pass rate of first time initial and annual inspections; the statistic decreased to an overall first time pass rate of 58 percent for the months of October 2009 to June The reason for the decrease is unknown, but SDHC intends to examine the issue thoroughly. Self-Certification of Repairs Update The Fiscal Year 2010 MTW Plan stated 337 units failed inspection due to minor fail items. At the close of the fiscal year, 355 units submitted the Self-Certification of Repair form indicating the correction of minor fail items occurred rather than scheduling a secondary inspection. Since the issuance of the form is tied directly to the presence of minor fail items, the data does not indicate significant fluctuations with regard to an increase or decrease in minor fail items. Self Certification of Repair Given Received Given Received Biennial Inspection Cycle Update At implementation, approximately 6,229 units were identified as eligible for the Biennial Inspection Cycle, an increase of 201 units since the approval of the Fiscal Year 2010 MTW Plan. The increase of eligible units indicates a reduction in both minor and major fail items since a unit does not qualify for the cycle unless the inspection receives a Pass result at the conclusion of the first inspection. Note: A unit receiving the Self-Certification of Repair form is still considered a Fail for the purposes of the initiative. Under regular HCV regulations, the minor fail item would have caused the inspection to fail, therefore, SDHC still considers this a failed inspection. In accordance with this rationale, a unit is not eligible for the Biennial Inspection Cycle if receiving the Self-Certification of Repair form at the close of the inspection. Undesirable Outcomes Update SDHC acknowledged the possibility of an increase in the number of fails with regard to the first annual or initial inspection conducted on a unit due to the less frequent inspections. The potential undesirable outcome 12

15 was measured by calculating the number of units passing the annual or initial inspection on the first time attempt in comparison to the total number of inspections conducted in a given month. As previously noted in the report, SDHC determined the comprehensive pass rate for all first time inspections conducted on a unit decreased from 68 percent to 58 percent during Fiscal Year SDHC believes the biennial inspection schedule will improve the first time pass rate percentage and anticipates the percentage will increase in Fiscal Year Discussion of Benchmarks: Due to the implementation schedule of the initiative, a complete series of data could not be generated to definitively measure the initiative. A full analysis of the Revised Inspection Protocol initiative will be provided in the Fiscal Year 2011 MTW Report upon a full year of implementation. The scorecard below provides an update on the progress of the initiative. Metric Baseline 2009 YTD Benchmark Total No. of inspections 20,177 14,614 <16,545 Total No. of annuals 16,890 12,232 Total No. of passing annual inspections 12,630 9,273 Total No. of units passing inspection the first time 10,391 8,055 11,430 Total No. of failed annual inspections 4,260 2,959 <3,834 Total number of self-certifications received Full-time equivalent to complete all inspections Total No. of units on biennial cycle 0 6,028 Potential Undesirable Outcomes YTD Acceptable Levels Pass rate for first time inspections conducted on a unit 58% 68% Revisions to Benchmarks or Metrics: The metric measuring the annual number of new property owners entering the program was removed because SDHC determined the initiative was solely centered on reducing expenditures rather than encouraging new property owners to rent units to HCV tenants. Additionally, although SDHC has the ability to measure increases and decreases in the number of property owners on an annual basis, the reasons for the fluctuations in the number of property owners cannot be tied specifically to the initiative. Local economic conditions may impact the ability of potential and existing landlords to participate in the HCV program. SDHC also made the decision to remove the subset of secondary metrics measuring the number of minor and major fail items when a unit fails an inspection. The metrics overall proved dynamic with the ability to relate the data directly to the primary metric and indirectly to the secondary metrics, thus serving as indicators of the presence of minor and major fail items. The issuance of the Self-Certification of Repairs form signifies the number of minor fail items while placement of units onto the Biennial Inspection Cycle indicates a reduction in both minor and major fail items. Since a comparable number of units were placed on the biennial cycle when correlated to the baseline, no major changes can be supposed in relation to the number of fail items. Since the numbers contained in the scorecard are consistent with the baselines, SDHC further determined the metrics obsolete and of no intrinsic value. Furthermore, SDHC is measuring the number of units passing inspection on the first attempt which also serves as an indicator of the initiative s influence on tenants and property owners to qualify for the Biennial Inspection Cycle. The metric would further indicate a reduction in minor and major fail items. 13

16 Original Benchmarks and Metrics included the following: Benchmarks Reduce total number of inspections by 3,948 (18%) by June, 30, 2011 Save 1.5 full-time equivalents to complete inspections June 30, 2011 Increase the number of units passing the first inspection by 10% by June 30, 2011 Reduce number of failed inspections by 10% by June 30, 2011 Metrics Annual number of inspections Annual number of annual inspections Annual number of passing annual inspections Annual number of failed annual inspections Annual number of minor fail items of failed annual inspections Annual number of major fail items of failed annual inspections Annual number of new property owners entering the program Annual number of self-certifications completed Full-time equivalent (FTE) savings to complete all inspections Total number of units on the Biennial Inspection Cycle Revised Benchmarks and Metrics are as follows: Benchmarks Reduce total number of inspections by 3,632 (18%) by June, 30, 2011 Save 1.5 full-time equivalents to complete inspections June 30, 2011 Increase the number of units passing the first inspection by 10% by June 30, 2011 Reduce number of failed inspections by 10% by June 30, 2011 Metrics Total number of inspections Total number of annual inspections Total number of passing annual inspections Total number of units passing inspection the first time Total number of failed annual inspections Total number of self-certifications completed Full-time equivalents (FTE) savings to complete all inspections Total number of units on the Biennial Inspection Cycle SDHC will continue to measure the initiative during Fiscal Year 2011 to ensure the overall success of the initiative. Changes to Data Collection Methodology: No changes were made to the data collection methodology with the exception that data for the initiative will be measured on a quarterly basis rather than a monthly basis during Fiscal Year Changes to Authorization Used: No changes were made to the authorizations used to implement the initiative. Description of Authorization or Regulation Waived: MTW Agreement Attachment C, Section D(5) containing waivers of Section 8(o)(8) of the 1937 Act and 24 CFR 982 Subpart I. MTW Agreement Attachment D containing waivers of 24 CFR , , and

17 2. AUTHORIZE SDHC TO INSPECT AND DETERMINE RENT REASONABLENESS FOR SDHC-OWNED PROPERTIES Impact of Activity: Federal regulations require an outside inspection contractor to perform HQS inspections and rent reasonableness determinations on Public Housing Authority-owned units receiving Federal subsidies for housing programs. SDHC owns 1,543 affordable housing units in which the regulations under standard HQS requirements apply. In order to reduce cost and achieve greater cost effectiveness in Federal expenditures, SDHC received permission from HUD to conduct inspections and determine rent reasonableness for SDHC-owned units using MTW waivers. Since contracted inspections and rent reasonableness determinations cost more per unit, eliminating the requirement to contract with a third party inspection company reduces the overall cost of conducting annual, initial, and special inspections. At the end of calendar year 2008, a third party inspection service conducted 4,597 HQS inspections at an annual cost of $128,000. An annual cost savings of approximately $19,200 was anticipated as a result of the initiative. In Fiscal Year 2010, SDHC realized an annual cost savings of $117,888 due to conducting in-house inspections on SDHC-owned units. Only 358 inspections were conducted by a third party inspection company on SDHC-owned units. During the course of data analysis, SDHC identified the need for revisions to the benchmarks and metrics in order to capture the full impact of the initiative. The revisions and supporting rationale are discussed more thoroughly in the narrative. The scorecard below provides a detailed quantitative analysis of the initiative using the revised benchmarks and metrics. Metric Annual number and percentage of inspections conducted in-house on SDHC-owned properties Annual cost and percentage of total cost for inspections conducted in-house on SDHC-owned properties Annual number and percentage of inspections conducted by a 3rd party company on SDHC-owned properties Annual cost and percentage of total cost for inspections conducted by a 3rd party company on SDHC-owned properties Baseline 2009 YTD No. No. % Benchmark 0 1,553 81% >1,500 $0 $35,719 78% >$34,500 4, % <500 $128,000 $10,112 22% <$19,200 Potential Undesirable Outcomes Annual number and percentage of total in-house inspections conducted on SDHC-owned units requiring special inspections Annual number and percentage of tenant complaints related to in-house inspections on SDHC-owned units YTD No. % Acceptable Levels 57 3% 10% 0 0% 1% SDHC would like to recognize the success of the initiative to date; all benchmarks were realized in the first year of implementation. The continued utilization of this measure will ensure the statutory objective of reducing costs and achieving greater cost effectiveness in Federal expenditures is accomplished in the future. Discussion of Benchmarks: In order to measure the success of the initiative, SDHC tracked both the annual number and percentage of inspections conducted in-house and by a third party contractor on SDHC-owned 15

18 properties. The anticipated result was SDHC would conduct 4,597 inspections of SDHC-owned units, or 100% of all inspections on SDHC properties. Review of the baselines concerning the number of inspections conducted by a third party inspection service and the related costs indicated the baseline numbers were inflated due to the Public Housing Disposition occurring in December Former public housing units were inspected twice in one year: Once for an initial inspection before the new lease and HCV HAP contract were signed by the tenant/property owner and for a second inspection scheduled to coincide with the tenant s annual certification date. Therefore, the baseline included an elevated number of third party contract inspections due to the disposition. Other factors affecting the progression towards attaining the benchmarks include the reduction of the overall number of inspections conducted as a direct result of the Revised Inspection Protocol initiative and that third party inspectors are still used when the number of scheduled inspections exceeded the capacity of available in-house staff. The benchmark as stated in the Fiscal Year 2010 MTW Plan cannot be reached for these reasons. Additionally, the benchmark may not be achievable as long as the services of a third party inspection company are utilized to inspect both SDHC-owned and non-sdhc-owned properties. Since a contract inspection company may be used for some inspections on SDHC-owned units due to the above named reason, the Revised Inspection Protocol initiative is reducing the overall number of required inspections, and the baseline number of third party inspections was inflated, the benchmark most likely will not be reached and required revision. Please note: Since SDHC is actively acquiring additional affordable housing units, some of which may be subject to HQS inspections using MTW flexibility, future cost savings and the number of inspections may increase. SDHC also tracked the annual cost to inspect SDHC-owned units; costs were tracked related to in-house inspections and third party inspections. The anticipated benchmark is to save $19,200 (15% of the $128,000 baseline) by June 30, As aforementioned, since the number of inspections was reduced due to the Revised Inspection Protocol initiative and third party inspectors still conduct a limited number of inspections on SDHC-owned units, the total cost savings cannot be accurately measured using this metric. Revisions to the benchmarks and metrics were necessary for the above reasons. Potential Undesirable Outcomes included a potential increase in special inspections on SDHC-owned units and the possibility of tenant complaints related to inspections on SDHC-owned units. Baseline data does not exist concerning the number of special inspections and tenant complaints prior to implementation of the initiative when all inspections were conducted by a third party entity. However, SDHC designated Acceptable Levels of tenant complaints and special inspections related to in-house HQS inspections. At the close of Fiscal Year 2011, zero tenant complaints were received concerning SDHC staff conducting inspections on SDHC properties, and 4 percent (meeting the acceptable level of less than 10 percent) of the total inspections conducted on SDCH-owned units were special inspections. Please note: Special inspections are anticipated for all units as a matter of practice and is an inherent part of rental assistance programs. SDHC conducted a total of approximately 602 special inspections program wide, or 4% of all inspections program wide. The percent of special inspections relative to the number of inspections conducted on units are consistent regardless of whether or not the property is owned by SDHC or an independent entity. Revisions to Benchmarks or Metrics: SDHC determined two additional metrics and benchmarks were required in order to measure the effectiveness of the initiative. The metrics measuring the annual number and percentage of inspections conducted in-house for SDHC-owned properties and the cost to conduct inhouse inspections were not sufficient to measure the total impact of the initiative. While the metrics did isolate information related directly to SDHC conducting inspections on SDHC-owned property, the metrics did not capture all relevant data. The two primary reasons for the discrepancy in data are as follows: 1. The baseline and the metric stated 100 percent of the 4,597 inspections completed by a third party inspection service for SDHC-owned properties would be completed in-house by SDHC. Since 16

19 SDHC anticipated decreasing inspections overall through MTW initiatives (self-certifying minor fail items and using a biennial inspection cycle for qualifying units), the number of total inspections for SDHC-owned properties also decreased. The benchmark of conducting an additional 4,597 inspections in-house is not attainable. 2. The metric assumes SDHC will not be utilizing the services of a third party inspection service. SDHC has continued to contract with a third party inspections company as a mechanism to fill in when inhouse staff is on vacation, ill, or temporarily reassigned. Two additional metrics and corresponding benchmarks were added to fully illustrate each facet of the inspections process and monitor the initiative s success accordingly. Metrics measuring (1) the annual number and percentage of inspections conducted by a third party company on SDHC-owned property and (2) the annual cost and percentage of total costs for inspections using a third party company to conduct inspections on SDHC-owned property were added to capture additional data. Benchmarks were applied in a format allowing SDHC to use a third party company to a minor degree, but not to exceed a designated amount which corresponds to the original benchmarks. The revisions to the metrics and benchmarks enabled SDHC to calculate the total costs savings due to the initiative whereas the original benchmarks and metrics did not capture the full spectrum of information. By also measuring the number of inspections conducted on SDHC-owned units by the third party inspection company and applying the cost per unit charged for the inspections, SDHC calculated the total cost of conducting inspections on SDHC properties by tallying total expenditures for inspections completed by both SDHC and the third party inspection company. When the data was compared, SDHC determined a third party contractor conducts approximately 23 percent of inspections on agency owned units, or 358 inspections. The result was within the parameters set forth in the benchmarks. The cost of the inspections totaled $10,112 annually, a significant reduction when compared to the original baseline of $128,000. Benchmark reach dates were modified to June 30, 2011 as SDHC will continue to measure the initiative throughout the course of Fiscal Year Original Benchmarks and Metrics included the following: Benchmarks Move 100% of inspections in-house for SDHC-owned properties by June 30, 2010 Reduce annual inspection costs related to SDHC-owned units by 15% (approximately $20,000) by June 30, 2010 Metrics Annual number and percentage of inspections being conducted in-house for SDHC-owned properties Annual cost to inspect SDHC-owned units Revised Benchmarks and Metrics are as follows: Benchmarks Annual number of inspections conducted in-house on SDHC-owned properties will be >1,500 by June 30, 2011 Annual cost for inspections conducted in-house on SDHC-owned properties will be >$34,500 by June 30, 2011 Annual number of inspections conducted by a 3 rd party company on SDHC-owned properties will be <500 by June 30, 2011 Annual cost for inspections conducted by a 3 rd party company on SDHC-owned properties will be <$19,800 by June 30,

20 Metrics Annual number and percentage of inspections conducted in-house on SDHC-owned properties Annual cost and percentage of total cost for inspections conducted in-house on SDHC-owned properties Annual number and percentage of inspections conducted by a 3 rd party company on SDHC-owned properties Annual cost and percentage of total cost for inspections conducted by a 3 rd party company on SDHCowned properties SDHC will continue to measure the initiative during Fiscal Year 2011 to ensure the overall success of the initiative. Changes to Data Collection Methodology: No changes were made to the data collection methodology. Changes to Authorization Used: No changes were made to the authorizations used to implement the initiative. Description of Authorization or Regulation Waived: MTW Agreement Attachment C, Section D(2)(c) containing waivers of Section 8(o)(10) of the 1937 Act and 24 CFR MTW Agreement Attachment C, Section D(5) containing waivers of Section 8(o)(8) of the 1937 Act and 24 CFR 982 Subpart I. Attachment D containing waivers of Section 8(o)(11) of the 1937 Act and 24 CFR , , (b), 982 Subpart K, and IMPLEMENT TRIENNIAL INCOME RECERTIFICATIONS FOR ELDERLY AND DISABLED CLIENTS Impact of Activity: The Triennial Recertification Cycle was implemented to reduce the number of annual certifications for elderly and/or disabled households with a fixed income. The initiative targeted reducing staff time and thereby achieving greater cost effectiveness in Federal expenditures by decreasing the number of annual certifications required for the Triennial households. Upon implementation of the initiative, SDHC opted to place each Triennial household on a three year certification schedule to include one full annual certification and two cost of living adjustment annual certifications where the fixed income was updated to reflect an increase or decrease in the cost of living. Note: Triennial households are still able to request an interim certification for a decrease in income at anytime. Approximately 4,607 households were placed on the Triennial Recertification Cycle during implementation. (The number of household on the Triennial cycle fluctuates as households become eligible/ineligible to participate on the cycle.) The Triennial caseloads were divided among four staff members thereby eliminating five caseloads. The five respective staff members were reassigned to existing positions in the department to assist in various capacities or due to staff turnover/promotions, including the creation of positions for an HCV Homeownership Assistant and Choice Communities Assistant. In June 2010, a decision was made to add a fifth Triennial caseload. An unanticipated effect of consolidating the elderly and/or disabled households has been the large amount of additional customer service that is required for the Triennial population. In order to provide excellent customer service to these participants, it was determined a fifth caseload would be beneficial. At the close of Fiscal Year 2010, 4,053 families were participating in the Triennial Recertification Cycle. We anticipate this number will expand with the eventual broadening of the allowable fixed income definition. SDHC anticipated cost savings related to copying, printing, and mailing documents corresponding to the annual recertification process. Since only one-third of monthly certifications require a full recertification, SDHC has expended approximately $3,068 on the cost of paper, ink, and postage 18

21 since implementation of the initiative on October 1, The total cost of copying, printing, and mailing documents would have been about $4,536 if the participants underwent a full recertification instead of a COLA recertification. Metric Annual staff time in hours required to process full recertifications and off-year adjustments for Triennial households Baseline 2009 Occupancy/Leasing staffing requirements No. YTD No. Benchmark 9,500 2,559 < 4,750 Annual costs for printing, copying, and mailing recertification packets and off-year adjustment documents to Triennial households $10,000 $3,068 < $5,000 Potential Undesirable Outcomes YTD No. Acceptable Levels Annual number of interims being completed for Triennial households 206 2,800 Discussion of Benchmarks: The initiative was implemented effective October 1, 2009 with the expectation all benchmarks will be achieved by June 30, Thus far, preliminary data indicates SDHC is on track to attain each benchmark. Although numerical figures from Quarter 1 do not reflect a full set of data since the transition into the Triennial Cycle only represented one full month of annual certifications processed, Quarters 2 and 3 demonstrate SDHC is making progress towards each objective. Revisions to Benchmarks or Metrics: The benchmark reach dates were revised from December 31, 2010 to June 30, Since the initiative was implemented effective October 1, 2009 not enough time elapsed to accurately measure the success of the initiative by the close of Fiscal Year An additional twelve months to measure the initiative rather than six months allows SDHC to more thoroughly analyze the impact of the initiative and address any concerns which may arise over the course of the next year. Benchmarks were also revised to provide the ability to attain and supersede a central goal. The original wording of the benchmarks limited success to the achievement of a minimum value: Reducing staff time and other related costs by 50 percent. Rephrasing the benchmark rendered the capacity to attain and surpass the minimum requirement: Reducing staff time and other related costs by 50 percent or more. Original Benchmarks are as follows: Reduce annual staff time used to process elderly/disabled recertifications by 50 percent (4,750) by December 31, 2010 Reduce annual printing, copying, and postage costs required to process elderly/disabled recertifications and off-year rent adjustments by 50 percent ($5,000) by December 31, 2010 Revised Benchmarks are as follows: Annual staff time in hours required to process full recertifications and off-year adjustments for Triennial households will be less than 4,750 by June 30, 2011 Annual costs for printing, copying, and mailing recertification packets and off-year adjustment documents to Triennial households will by less than $5,000 by June 30, 2011 Changes to Data Collection Methodology: No changes were made to the data collection methodology. 19

22 Changes to Authorization Used: No changes were made to the authorizations used to implement the initiative. Description of Authorization or Regulation Waived: MTW Agreement Attachment C, Section C(4) containing waivers of Sections 3(a)(1) and 3(a)(2) of the 1937 Act and 24 CFR and MTW Agreement Attachment C, Section D(1)(c) containing waivers of Section 8(o)(5) of the 1937 Act and 24 CFR CHOICE COMMUNITIES Impact of Activity: The Choice Communities initiative focused on providing incentives and assistance to MTW program participants aspiring to move out of high poverty areas into low poverty areas. SDHC used a four-pronged approach containing the following elements: 1. Eliminating the 40% affordability cap on family share at the time of initial lease up in low-poverty neighborhoods. 2. Creating a security deposit loan program for families moving from high-poverty areas to low-poverty areas. 3. Providing resources, information, and guidance to families expressing interest in moving to low-poverty neighborhoods. 4. Increasing the payment standards in low-poverty areas. Nine low-poverty zip codes were identified as target areas for participants seeking to relocate to an area of low-poverty. Informational flyers concerning the Choice Communities program was disseminated via move packets with instructions to contact the assigned Choice Communities Housing Assistant (CCHA) for further details. Occupancy staff members also educated clients about the opportunities under the Choice Communities initiative when receiving telephone calls and made referrals to the CCHA. Three elements of the initiative were implemented in January 2010, with the higher payment standards taking effect June Client interest in the opportunities afforded by the Choice Communities initiative was almost immediate as telephone calls concerning the program began in January Clients continue to apply for the Security Deposit Loan Program and the ability to exceed the 40% affordability cap. Packets containing information about Choice Communities areas are distributed, per the request of interested clients, on a weekly basis. Additionally, SDHC is currently considering different methods of marketing the initiative with the objective of increasing interest in the program over the next fiscal year. Benchmarks are not expected to be achieved until June 30, 2011 but SDHC is optimistic the targets are achievable since client interest continues to grow over the course of time. 20

23 Areas of MTW Voucher Utilization 20% 4% 76% Low Poverty Medium Poverty High Poverty Discussion of Benchmarks: The initiative was implemented in two phases effective January 1, 2010 and June 1, 2010 with the intent to fully measure and quantify all benchmarks by June 30, A complete analysis of the initiative will be contained in the Fiscal Year 2011 Annual Report. The scorecard below summarizes the progress of the initiative since implementation and the benchmarks and metrics currently measured: Metric Total No. and percentage of participants moving from high/medium to low areas of poverty Total No. and percentage of participants moving from high to medium areas of poverty No. and percentage of participants moving to Choice Communities participating in Security Deposit program Baseline 2009 YTD No. % No. % Benchmark 33 3% 43 4% 10% 96 7% 14 8% 20% % No. and percentage of participants moving to Choice Communities receiving increased payment standards % No. and percentage of participants moving to a new unit received Moving for Opportunities counseling No. and percentage of Choice Communities tenants exceeding the 40% affordability cap at move-in % 0 0% 3 7% No. of loans 6 Dollars loaned $6,450 Average dollars loaned $1,075 At least $700 Average HAP cost per unit in low poverty areas $854 $864 Average HAP cost per unit in high poverty areas $824 $829 Percent of participants moving into Choice Communities who remain in unit at least 1 year by 6/30/2011 0% 80% Revisions to Benchmarks or Metrics: The metric measuring the total number and percentage of participants moving from high to low-poverty areas participating in the security deposit loan program, receiving an increased payment standard, and/or participating in the Moving for Opportunity program 21